Kudu project on track for completion in five years

Oct 21, 2004 02:00 AM

Partners in the development of the Kudu gas-to-power project say it is on track for completion in five years' time. The Ministry of Mines, Energy Africa, NamPower as well as the National Petroleum Corporation of Namibia (Namcor) announced that they have started with detailed environmental, technical, commercial and financial feasibility and viability studies.
Engineering design studies are also under way to help the partners make a more accurate estimate of the money needed for the project. For now, the initial estimates for the development of the project amount to $ 800 mm.

The Kudu gas fields, considered to be some of the largest in the world, have proven gas reserves of 1,3 tcf. Mines Minister Nickey Iyambo says the project will help avert a possible power crisis expected by 2007.
"By as early as 2007 our country may have difficulty in servicing the peak demand periods. We have extensively researched all options to secure the future supply of electricity to our people," Iyambo said.

Namibia imports more than 50 % of its electricity from South African power utility Eskom but the demand is starting to outstrip the supply. NamPower, Namcor and Energy Africa signed a joint development agreement on the gas-to-power project in July.
Eskom and the Namibian utility signed another agreement on the sale of the electricity to South Africa. Energy Africa has a 90 % interest in the project and will develop the field with Namcor. Namcor owns the other 10 %.

NamPower, with technical help from Eskom, will develop and operate a gas-fired power station at Oranjemund. The electricity will be sold to NamPower for resale into the Namibian market. The balance will be sold to Eskom.
The proven gas reserves of 1,3 tcf would be sufficient to fuel an 800-MW power station for the next 22 years. However, the reserves are estimated at 3,3 tcf. To prove that quantity, the developers need to produce a reservoir for one to two years and drill at least one more test well.

The first phase of the power station will be the construction of a 400 MW power plant in March 2006, taking 36 months. The gas will be onshore by March 2009 and the first gas will be delivered to clients by October 2009. In the same year, the developers want to construct a second 400 MW gas-fired power plant.
Energy Africa's Managing Director, Ridwaan Gasant, says they hope there will be enough reserves for two more power plants of 400 MW by 2014. South Africa is expected to run out of electricity generation capacity by the end of the decade.

Iyambo says the partners have appointed ESB International, the international consultancy arm of electricity ESB in Ireland, as technical advisor to the project. LeBoeuf, Lamb, Greene and MacRae Pty will be the legal advisor and a consortium led by Ernst and Young will serve as financial advisors. During the construction process 1,500 direct jobs will be created, but after that the hi-tech operation will only provide work for about 100 people.
The Kudu project is expected to boost power generation in the Southern African power pool.

Source: The Namibian
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